Subminimum wage reform  is eyed 

Moving disabled people out of subminimum wage work and into better-paying jobs is the goal of an $10.5 million initiative […]

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Moving disabled people out of subminimum wage work and into better-paying jobs is the goal of an $10.5 million initiative announced September 16. State grants to service providers throughout Minnesota will help people earn competitive wages and ultimately, live more independently. 

The funding for the program was approved by the Minnesota Legislature in 2021 and now being allocated by the Minnesota Department of Human Services (DHS). 

 “Many people with disabilities want to be part of the general workforce, but have not had the opportunity,” said DHS Commissioner Jodi Harpstead. “Working-age Minnesotans with disabilities should have the chance to work and earn a competitive wage if they want to.”  

Provider Reinvention Grants will go to 22 employment services providers. The University of Minnesota’s Institute on Community Integration will also receive funding to provide statewide technical assistance, engaging with job seekers and their families, and helping providers with training and toolkits. 

The subminimum wage issue is one that sparks controversy within Minnesota’s disability community. A longstanding federal law has allowed Minnesotans with an array of disabilities to be paid less than the federal minimum wage. The law was enacted during the Great Depression as a way to help disabled people find employment. 

The practice is criticized as unfair and discriminatory by advocates., and is called out as a violation of the federal Americans with Disabilities Act Pay is typically just pennies on the dollar for menial jobs. 

A state task force report indicated that between 4,500 to 6,000 Minnesotans made less than minimum wage in 2021. 

 But others have contended that if subminimum wage work is eliminated, some disabled people will miss out on needed social and work opportunities. Day activity centers and employment centers sometimes pay subminimum wages. 

The grants are expected to be used for a wide variety of supports and services. 

Eight employment service providers will receive grants to phase out subminimum wages by April 1, 2024. They are Floodwood Services & Training, Floodwood; Pine Habilitation and Supported Employment (PHASE), Sandstone; Hope Haven, Rock Valley, Iowa, for an employment center in Worthington; Rise, Spring Lake Park; Rising Phoenix, Wadena; TSE Inc., Roseville; Advance Opportunities, Marshall; and Employment Enterprises, Little Falls. 

Fourteen employment service providers will receive funding to support more people in reaching employment goals. They are Accord, St. Paul; Arrowhead Community Employment, Duluth; Empower Inclusion, Excelsior; Kaposia, Little Canada; Lutheran Social Service of Minnesota, St. Paul; MRCI, Mankato; Midwest Special Services Inc., St. Paul; NorthStar Community Services, Cloquet; Productive Alternatives, Fergus Falls; Reach for Resources, Minnetonka; REM Heartland, Mankato; Residential Services of NE MN, Duluth; Trillium Works, Duluth; and Udac, Duluth. 

A task force is studying subminimum wages. The group was established by state lawmakers in 2021, and members are to submit a report to state lawmakers in February 2023. Recommendations are to be made for what to do if subminimum wages are phased out by August 2025. 

The task force is to identify benefits to the state in eliminating subminimum wages, barriers to eliminating subminimum wages and potential solutions, ongoing funding and resource strategies, strategies to increase wages and improve work opportunities and develop a plan to evaluate, measure and track progress. The task force must also engage and educate people who would be affected and advise DHS on plans for limiting subminimum wages in the disability waivers. 

More than a dozen states have already prohibited subminimum wages. 

Legislative issues coverage is by Editor Jane McClure. 

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